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People flee to crypto during COVID-19 crisis

Crypto is seeing increased popularity during the spread of the coronavirus, with FinTech 2gether measuring a 236 per cent increase in retail cryptocurrency transactions, and Bitcoin growing 22 per cent in a week.

The Spanish company enables users to spend crypto anywhere with full support from Visa, and spending data revealed that the biggest increase was in crypto purchases, which accounted for 75 per cent of all trading operations on 2gether’s platform.

The data also found that 63 per cent of all trading operations were done using Bitcoin, 27 per cent used Ethereum, Cardano accounted for 3 per cent, and Basic Attention Token, Bitcoin Cash y Litecoin held 1 per cent respectively. The rest of cryptos had a representation below 1 per cent each.

It is too early to say whether or not cryptocurrencies like Bitcoin are true safe-haven assets, according to Danny Scott, CEO of crypto exchange and wallet provider CoinCorner.

However, Bitcoin is outperforming gold at the moment; in the past 12 months, gold has increased by 14 per cent and Bitcoin by 70, while in the past week, gold is down 4 per cent and Bitcoin is up 22 per cent.

“The past decade has been a turbulent time for Bitcoin – we’ve experienced bull markets, bear markets, 10% swings (in both directions), China banning Bitcoin, China unbanning Bitcoin, China banning Bitcoin (again), China unbanning Bitcoin (again), hard forks, the “death of Bitcoin” more than 380 times… and more. Bitcoin is not immune, but it has become weathered to these events,” Scott said.

The currency rose from $7,200 to $10,400 in February and was set for a “Halving” in May, but the global panic caused by the spread of coronavirus caused people to sell assets for cash.

“People have often touted Bitcoin as a ‘safe haven’ asset, but the reality is that we’ve never lived through a crisis that has had the opportunity to test this theory, until now,” Scott noted.

READ MORE: CoinCorner: Coronavirus creates Bitcoin price pressure

“Initially, as the Bitcoin price dropped alongside everything else, people were far too quick to dismiss it as a safe haven asset. However, what people on the outside fail to see is how resilient Bitcoin has been over the last 10 years to events around the world, and this time is so far proving no different.

“The price has very quickly bounced back (as it always has done), while other assets and stocks have continued to decline or slowly settle.”

Scott explained that CoinCorner is set to have its biggest March in five years, volume-wise, with sign-ups increasing by 40 per cent from previous weeks. Furthermore, around 95 per cent of trades are buying, not selling.

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